Day: April 5, 2016

West Virginia’s largest natural gas LDC (local distribution company) is Mountaineer Gas–with 220,000 customers, 450 employees and servicing 49 of WV’s 55 counties. Mountaineer Gas maintains close to 6,000 miles of pipeline. They’d like to add another 56 miles of pipelines to that number. Mountaineer has filed an application with the WV Public Service Commission to build a $45 million expansion of their distribution network in Berkeley, Jefferson and Morgan counties (the eastern panhandle of WV). Why? To deliver more Marcellus Shale gas to industrial customers who want to build manufacturing plants in the region. There is some natural gas in the area now–but not nearly enough. The new lines, which are not high pressure transmission lines but low pressure distribution lines, would bump up the volume of gas and deliver it to locations where new plants want to build. Local economic development people are excited as this provides a foundation for long-term growth in the region. Below are the details of Mountaineer’s application, along with a copy of the official paperwork they’ve filed with the WV PSC…Continue reading

We understand the value of a healthy, optimistic attitude. We consider ourselves to be a “glass half full” rather than “glass half empty” type of people. But we’re also realists. Last week the builders of the proposed PennEast Pipeline–a $1.2 billion, 114-mile, 36-inch diameter pipeline that will deliver approximately 1 billion cubic feet of natural gas per day from the Marcellus gas fields of northeastern PA to locations in southeastern PA and across the border to Trenton, NJ–received what we considered bad news. The Federal Energy Regulatory Commission (FERC) told PennEast they would extend the amount of time they are taking until December of this year, rather than August, to complete their Environmental Review. And FERC won’t issue their final decision on authorizing the project until March 2017–at the earliest. PennEast had requested FERC wrap it all up by this August–an 8-month delay. In our book, that’s mildly bad news. But yesterday PennEast issued a press release saying the FERC announcement is an “important milestone,” almost lauding FERC for moving so quickly given a plateful of pipeline applications–even though it means the PennEast project now won’t be completed until 2018 instead of 2017. Is this a “glass half full” optimistic attitude? Or self-deluding denial? We can think of many reasons why it’s a manifestly bad thing that FERC has delayed–not the least of which is are multiple lawsuits sure to be launched by the radicals at THE Delaware Riverkeeper…Continue reading

There is a new development in the case of an illegal ban on injection wells passed by Highland Township in Elk County, PA. In 2013 the radical leftist PA-based group Community Environmental Legal Defense Fund (CELDF) convinced enough ignoramuses in Highland Township to pass a so-called Community Bill of Rights. Seneca Resources, a driller with leases and an active drilling program in Elk, had planned to drill an injection well on their own property to dispose of their own flowback and produced water. The CELDF-inspired ordinance Highland Twp prevented it, and Seneca threatened to sue the town (see Seneca Resources Threatens to Sue PA Town over Injection Well). Seneca made good and filed to sue, but the town and CELDF tried to prevent the lawsuit. Last week U.S. Magistrate Judge Susan Paradise Baxter ruled that Seneca has standing to sue and the lawsuit will now go forward. By the way, in October of 2015, Judge Baxter ruled in an almost identical case in Grant Township (located in nearby Indiana County) that the town’s injection well ban was illegal (see Fed Judge Overturns Grant Twp, PA Ban on Injection Wells). Even the dullards who enacted the ban in Highland should be able to see the writing on the wall. They’re about to lose. Taxpayers in Highland who are footing the bill (since the CELDF doesn’t pay for legal fees and judgments) are the biggest losers. They may want to remember that come election time…Continue reading

We spotted a story from the Hudson Valley area of New York State–close enough to New York City that it’s infested with anti-drilling liberals–that caught our attention for a couple of reasons. It’s a story of about a protest held yesterday in Peekskill, NY. The protest was against Spectra Energy’s work on their Algonquin Incremental Market (AIM) pipeline project. From all appearances, four protesters showed up for the protest–and yet it got big news treatment. Most Sundays there are more than four people who show up at MDN HQ for lunch (when our kids come home to visit). The local newspaper hasn’t ever shown up to cover these momentous (for the Willis household) events. Perhaps if we held up a big banner outside that says “Welcome Home Children” the local news outlets would arrive and cover it? But we digress. The other aspect of the story that caught our attention is the admission by one of the protesters that they not only oppose the AIM project–they oppose all “fracked gas infrastructure” projects. She is demanding that NY “transition to safe, clean, renewable energy, which is wind, water and solar.” That is, the protesters are animated and motivated by an irrational hatred of all fossil fuels. How did the protesters arrive at their protest? Driving cars that burn fossil fuels riding on tires made from petroleum products and sitting on seats made from plastic (a petroleum product) wearing clothes on their bodies and shoes on their feet made from petroleum products. Holding up signs objecting to…petroleum products…Continue reading

David Wigham is a second-generation Ohio oil and gas attorney with nearly 25 years of experience in the industry. He recently wrote an article outlining the current situation in Ohio (and beyond) of renegotiating shale leases. Typically landowners sign a five-year lease with an energy company. If the company fails to drill on/under the property during that five-year period, there is usually a provision allowing the energy company to renew the lease for an additional five years–provided they make a new bonus payment. But here’s the conundrum for drillers: with the price of oil and gas so low, drillers don’t have enough cash to drill right now, and they don’t have enough cash to pay big bonuses for another five years. Many leases are now coming due at the five-year mark. What to do? Drillers are going back to landowners and asking them to renew the lease–but instead of receiving a lump sum bonus payment for the next five years, drillers are asking if they can pay landowners one year at a time, over the next five years. Should a landowner take the deal?…Continue reading

Last week Pennsylvania landowners (royalty owners) from around the state gathered in State College, PA for the 2016 NARO (National Association of Royalty Owners) PA Annual Meeting and Convention. A variety of interesting topics were addressed, including: support for House Bill (HB) 1391 that guarantees a minimum 12.5% royalty payment to landowners; coming lawsuits from landowners against the state over the state’s aggressive action in claiming ownership of the land under rivers and streams; and a call to boycott all films which star anti-fossil fuel man-child Leonardo DiCaprio…Continue reading

Midstream and utility company giant Dominion announced yesterday they are floating 10.2 million new shares of common stock in the company, hoping to raise $750 million. Dominion says it will use the money for “general corporate purposes,” to repay debt, etc.–but perhaps most importantly, to help “fund in part Dominion’s combination with Questar Corporation.” Questar is a Rockies-based integrated natural gas company and Dominion is attempting to buy them for $4.4 billion–so every penny counts in that endeavor (see Dominion Resources Makes Play for Western NatGas Company Questar). Here’s the particulars of Dominion’s new stock offering…Continue reading

As we reported in March, EV Energy Partners–an upstream master limited partnership (MLP) created by EnerVest that holds enormous acreage in the Ohio Utica Shale play–is in survival mode (see EV Energy Partners: No New Utica Wells in 2016, in Survival Mode). EVEP has no plans to drill new Utica wells in 2016. The company is on an austerity budget–only spending to complete 10 already-drilled wells in the Texas Barnett Shale. Yesterday EVEP announced they have had to decrease their borrowing base from $625 million to $450 million–down 28%. A company’s borrowing base is the value of its assets–in this case the value of the leases and oil/gas wells EVEP owns. Those assets are used as collateral to back up loans and IOUs. A lower borrowing base means a) they can borrow less money, and b) they will pay more in interest for the money they do borrow. Here’s yesterday’s EVEP announcement…Continue reading

So what’s happening with Halliburton’s $34.6 billion buyout of Baker Hughes? At last check the deal was at best a 50/50 proposition as to whether or not it would happen. Europe currently has the deal under a microscope (see Europe Puts Halliburton/BH Merger Under a Microscope). The European Commission launched a “second phase” of their investigation into the deal, which is problematic for Halliburton. The European Commission says they see “serious potential competition concerns” with the deal. Not good. But that was in January. Since then we’d not heard anything about the deal’s progress–until now. Yesterday the U.S. Dept. of Justice sued ValueAct Capital, accusing the company of purchasing $2.6 billion worth of stock in Halliburton and BH with “the intent to influence the companies’ business decisions as the merger unfolded.” The company has been charged with violating the reporting and waiting period requirements of the Hart-Scott-Rodino Antitrust Improvements Act…Continue reading

“You never let a serious crisis go to waste. And what I mean by that it’s an opportunity to do things you think you could not do before.” – Rahm Emanuel, when he was Barack Obama’s White House Chief of Staff. It seems the Obama Administration lives by that motto. Using the California Aliso Canyon methane leak crisis, the Obama Administration has convened an alphabet soup of federal agencies to put natural gas storage facilities–all of them, nationwide–through a new anal exam. You may recall a natural gas storage leak occurred in southern Cali that went on for months (see Cali Crisis Being Used to Promote Ban on NatGas Storage). In the wake of that crisis, using it as an excuse, the Department of Energy (DOE) and the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) launched a new Interagency Task Force on Natural Gas Storage Safety. The purpose of the group will be to study the Aliso Canyon crisis as well as hold workshops and “encourage” best practices with regard to natgas storage. Translation: new regulations will come along from the EPA and other super-aggressive federal agencies to further regulate the oil and gas industry–something the U.S. Constitution leaves up to the individual states…Continue reading